Washington housing market improves in second quarter of 2014

Washington state’s housing market rebounded from its first quarter performance, as the annual rate of existing home sales rose 6.4 percent in the second quarter of 2014.

While the increase from the first to the second quarter is notable, year-over-year sales activity is still down across the state, according to the second quarter housing report from the Runstad Center for Real Estate Studies at the University of Washington.

As measured on a seasonally adjusted basis, the home sales are on pace to total about 86,690 for the 2014 calendar year.

“While most economic statistics are reported at seasonally adjusted annual rates, these are not forecasts of future activity,” said Stephen O’Connor, Runstad Center director. “Nevertheless, at the current pace of sales we’re looking at a 7.5 percent decline in sales activity from the second quarter in 2013.”

Statewide, the median home sales price increased 7.9 percent from the same time last year and now stands at $270,900, up nearly 9 percent from the first quarter.

While the transition from the winter to the spring selling season is almost always a contributing factor, so is the lingering lack of supply, O’Connor said. This shortfall is most pronounced within the state’s major metropolitan areas. While both Snohomish and King County posted strong year-over-year increases of 10.4 percent and 7.6 percent respectively, median sales prices were lower than a year ago in 12 of the state’s 39 counties.

Local median house prices are highly variable, ranging from a low of $129,000 in Grays Harbor County to $454,000 in King County.

Runstad Center for Real Estate Studies

Given the increase in the median sales price, it was not surprising that housing affordability for all buyers statewide fell slightly to 144.2 from 152.6 a quarter ago, O’Connor said. This metric suggests that a middle-income family could afford a home selling for 44.2 percent above the median sales price, assuming a 20 percent down payment and a 30-year mortgage at prevailing rates.

Statewide, the first-time buyer index, a measure of affordability for new homeowners, also showed a small drop of 4.3 points, ending the quarter at 81. The first time buyer index measures the availability of a household earning 70 percent of the median household income to afford a home priced at 85 percent of the median value in the county.

Like the median sales price statistic, housing affordability varies widely across the state. The least affordable county is San Juan, with an all-buyer index of 90.1. Conversely, homes in Lincoln County offer the most affordability registering a value of 142.8. For first-time buyers in metropolitan areas, Benton County was again the most affordable and King County the least affordable.

The Runstad Center produces home sales statistics in partnership with Washington Realtors. Each quarterly release coincides with information from the National Association of Realtors regarding median home prices by metropolitan area.

Sales, median home prices and affordability data for all Washington counties are available at the Runstad Center’s website.

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For more information, contact Runstad Center Director Stephen O’Connor at 206-685-9989 or steveoco@uw.edu.